Despite progress around humanitarian intervention and the improved living conditions of refugee camps around the world, many refugees continue to face limited access to social and economic opportunities to integrate into a new country and live prosperous lives. Evidence from Consultative Group to Assist the Poor’s (CGAP) working paper on digital financial services in Jordan explains how financial services have a direct impact on health, education, gender equality, and food security on all individuals. Regarding an already vulnerable group, refugees are susceptible to a heightened sensitivity to the all of the aforementioned shocks and should have access to financial services within their host country or country of residence. By tackling the root of displacement, integration, refugees may be able to regain the fundamentals of security lost in seeking refuge.

The country of Jordan has been a trailblazer for both welcoming millions of refugees as well as innovative financial inclusion programming involving remittances. Given the increasingly clear link between financial inclusion and development, the Jordanian government serves as an example of pushing for greater regulatory action for migrants and refugees to have access to and use of financial services.

In a country of 9.5 million people with 2.6 million refugees, Jordan has been seen as a haven from neighboring crisis and conflict-affected countries for decades. Particularly in situations of need, many people are forced to rely on financial support from family members and friends. According to the German Federal Ministry for Economic Cooperation and Development, cross-border remittances by migrants living abroad have been a major source of income for the Jordanian economy for a long time: valued at 3.8 billion USD, these remittances accounted for approximately 10 percent of the country’s GDP in 2015.

However, the possibilities for migrants and refugees to receive money conveniently and at a low cost or keeping it safe are severely limited. At present, Syrian refugees are not permitted to open a bank account. Additionally, 75 percent of Jordanian citizens do not have a bank account. For this reason, most payments from abroad as well as within Jordan are made in cash.

The future for human integration and economic inclusion in Jordan shows promise with the adoption of digital financial services that can help to minimize the high risks and costs involved when money is transferred via informal channels or formally through money transfer operators. Building this digital, or cash lite, ecosystem provides access to financial services and enhances the self-help potential of refugees and low-income Jordanians. Access also makes it easier for this target group to integrate both economically and socially into host communities. It allows them to receive transfers from family and friends conveniently, securely, and at a low cost compared to informal money lenders. The recipients are able to keep their money safe and, as a result, are better prepared for emergencies and are able to establish a foundation of the basic needs of security.

Transitioning the Jordanian economy from a cash to a cash lite society requires financially including all vulnerable parts of the population and identifying the existing aid and remittance distribution structures. Programming initiatives from the Digi#ances project highlighted aid disbursement mechanisms as an important tool that links refugees to formal financial services. According to Digi#ances, prepaid cards or iris-scan-enabled ATMs may be a stepping stone to offering formal transaction and savings accounts to Syrian and other refugees in Jordan.

The wake of nearly universal mobile phone penetration offers another opportunity to integrate refugees into the formal financial services system through digital financial services. Equally, the fear of losing aid support is an incentive for refugees to manage their money through formal services. However, bringing cash-only families into the fold of digital financial services will require significant awareness-raising and marketing campaigns in order to leapfrog from low financial inclusion to digital financial inclusion.

Further progress building the new digital financial ecosystem and regulations in Jordan has been made through the Jordan Mobile Payment (JoMoPay) platform. The country’s regulatory environment has supported the growth of mobile financial services and has a comprehensive regulation on e-money issuance. However, there are still potential challenges surrounding consumer protection and data security. According to CGAP, Jordan’s infrastructure is well-placed to support domestic payments digitization.

Regardless of political and societal views about the changes brought from the influx of refugees and immigration, the concept of displacement is continuing to place individuals and families in precarious environments where it is difficult to establish a sense of security. By allowing access to safe remittance transfers, fund storage and usage, refugees and immigrants are able to regain the agency lost among the borders. Jordan serves as an exemplary host country that not only serves as a refuge, but is paving the way for financial inclusion, security, and integration of the most vulnerable parts of their population through digital financial services and ecosystems.